International Medical Device Maker; Four Executives Charged in Connection With Unlawful...

International Medical Device Maker; Four Executives Charged in Connection With
Unlawful Clinical Trials

PHILADELPHIA, June 16 /PRNewswire-USNewswire/ -- United States Attorney
Michael L. Levy and Acting Assistant Attorney General Michael F. Hertz today
announced the return of an indictment(1.) against Norian Corporation (Norian),
Synthes, Inc. (Synthes), and four top Synthes executives, Michael D. Huggins
(Huggins), Thomas B. Higgins (Higgins), Richard E. Bohner (Bohner) and John J.
Walsh (Walsh), charging them for their involvement in conducting clinical
trials of a medical device without the authorization of the FDA. Joining in
today's announcement were Food and Drug Administration (FDA) Office of
Criminal Investigations Special Agent-in-Charge Kim A. Rice; Department of
Health and Human Services (HHS) Office of Inspector General Office of
Investigations Special Agent-in-Charge Patrick Doyle; Defense Criminal
Investigative Service (DCIS) Special Agent-in-Charge Edward Bradley; and
Department of Veterans Affairs (VA) Special Agent-in-Charge Jeffrey G. Hughes,
Northeast Field Office, Office of Inspector General.

The indictment charges Norian with a total of 52 felony counts: conspiracy to
impair and impede the lawful functions of the FDA and to commit crimes against
the United States; seven counts of making false statements in connection with
an FDA inspection; and 44 counts of shipping adulterated and misbranded Norian
XR in interstate commerce with intent to defraud. The parent company, Synthes,
is charged with 44 misdemeanor counts of shipping adulterated and misbranded
Norian XR in interstate commerce, and the four executives, Michael D. Huggins,
Thomas B. Higgins, Richard E. Bohner and John J. Walsh, are each charged with
one misdemeanor count of shipping adulterated and misbranded Norian XR in
interstate commerce. As explained below, these crimes allegedly prevented the
FDA from carrying out its role of supervising clinical trials of significant
risk devices, and deprived patients of the safeguards provided by FDA
oversight of clinical trials.

According to the indictment, Synthes, a Delaware corporation based in West
Chester, Pa., is the United States branch of a large multinational medical
device manufacturer which specializes in trauma products to treat damaged
human bone. Norian, it is alleged, is a wholly owned subsidiary of Synthes,
specializing in the manufacture of osteobiologic medical devices, with a
principal place of business in West Chester, Pa.

Defendant Huggins was allegedly employed by Synthes as the President of
Synthes North America, a subsidiary of Synthes. It is alleged that in February
2004, Huggins became the President of Synthes Spine, a division of Synthes.
Defendant Higgins was allegedly the President of Synthes Spine, a division of
Synthes, reporting to Huggins. In February 2004, Higgins allegedly left that
position and became Synthes's Senior Vice President of Global Strategy. The
indictment alleges that defendant Bohner was employed by Synthes as its Vice
President of Operations, reporting to Huggins. Defendant Walsh was allegedly
employed by Synthes starting in August 2003 as its Director of Regulatory and
Clinical Affairs, Spine Division, and reported first to Bohner and later to
Huggins.

The indictment charges that from May 2002 until fall 2004 Norian conspired
with others, including Synthes and the four named executives, to conduct
unauthorized clinical trials of Synthes's medical devices, Norian XR and
Norian SRS(2.), in surgeries to treat vertebral compression fractures of the
spine (VCFs), a painful condition commonly suffered by elderly individuals.
These surgeries were allegedly performed despite a warning on the FDA-cleared
label for Norian XR against this use, and in the face of serious medical
concerns about the safety of the devices when used in the spine. According to
the indictment, before the marketing program began, pilot studies showed the
company that the bone cement reacted chemically with human blood in a test
tube to cause blood clots. The research also showed, in a pig, that such
Norian-caused clots became lodged in the lungs. Notwithstanding this
knowledge, the company allegedly proceeded to market the product for VCFs
without putting it through FDA-required testing. The company, it is alleged,
did not stop marketing the product until after a third patient had died on the
operating table. The indictment further alleges that after the death of the
third patient in January 2004, Norian and Synthes did not recall Norian XR
from the market - which would have required them to disclose details of the
three deaths to the FDA - but, instead, compounded their crimes by carrying
out a coverup in which they lied to the FDA during an official inspection in
May and June 2004.

Levy said, "We have an FDA approval process to be certain that medicines and
medical devices that are used in the United States have gone through
appropriate testing to determine that the products are safe and effective. The
FDA requires its independent review of the tests to ensure that companies do
not put their financial interests ahead of the health and safety of the
American people. The defendants charged today bypassed the process, with the
knowledge that the product that they were marketing posed potentially
significant risks. When predictable bad results occurred, they lied to the FDA
investigators. They put their profits ahead of responsible business practices
and the truth."

Hertz said, "This case is another example of the Department of Justice working
together as a team to enforce the Food, Drug, and Cosmetic Act against
companies and individuals that fail to market their products in compliance
with that statute."

"The FDA's Office of Criminal Investigations aggressively pursues and supports
the prosecution of those who endanger the public health by circumventing the
safeguards the FDA has in place to ensure that clinical trials are adequately
supervised and controlled and that the public receives medical devices that
have been shown to be safe and effective," said Michael Chappell, acting
associate commissioner for regulatory affairs. "We will continue to do all we
can to protect the public against companies and their representatives who are
not truthful, put patients' health at risk and undermine the regulatory
process."

"It is never acceptable for the health care industry to place the profit
motive over people's well being," said Patrick Doyle. "The FDA review process
was put in place to protect the nation's citizens. Should these companies and
executives ultimately be found guilty, they will have to pay a price for
placing at risk the very people for whom they purported to provide relief."

Summary of the Charges
The indictment charges that from the beginning, the intended market for Norian
XR was for an unapproved use, i.e., in surgeries to treat VCFs. According to
the indictment, the company recognized early on that there were two possible
solutions to this problem: (1) the legal solution, which was to disclose to
the FDA the intended use of the product and then to try to secure FDA approval
of XR for use in surgeries to treat VCFs after obtaining an investigational
device exemption (IDE) to investigate the safety and efficacy of the product,
and (2) the illegal solution, which was to promote XR for use in VCFs through
a limited so-called "test market," during which the company would evaluate the
safety and efficacy of the product in unapproved clinical trials and judge
their success according to its own standards. The indictment charges that the
company and its co-conspirators consciously and deliberately chose the illegal
solution. That is, according to the indictment, the company intentionally
bypassed the requirement that it obtain permission from the FDA to conduct
clinical trials of the XR device on human beings for an unapproved use -
permission that it knew it needed. With the so-called "test market," the
company allegedly tried to save time and money by cutting out the FDA's
oversight of clinical trials of its device. The indictment charges that the
company did this for two principal reasons: to rush XR to the market first,
before its competitors, and to generate published studies that it could use
later to convince other surgeons to use XR off-label to treat VCFs.

Starting as early as late summer 2002, the company allegedly approached
selected spine surgeons and asked them to use a predecessor device, SRS, in
VCF procedures as part of an initial Synthes "test market" for SRS. Despite a
June 2002 plea from one of Synthes's own surgeon consultants that conducting
such a "test market" would "amount to human experimentation whose only defense
seems to be that it will be a small study [,]" Norian and its coconspirators
allegedly embarked on the SRS "test market." According to the indictment, the
company taught the selected surgeons the recipe for mixing SRS with barium
sulfate to make it more radiopaque, a process called "back-table mixing," and
trained two groups of surgeons in the use of SRS to treat VCFs. After training
the two groups of surgeons as initial "test market" sites, the company
allegedly enlisted these "test market site" surgeons to train other surgeons
on how to use XR to treat VCFs.

According to the indictment, the company conducted two XR "Test Market
Kick-Off" surgeon meetings, and one surgeon forum, from August of 2003 through
mid-January 2004, training approximately 52 spine surgeons how to use Norian
XR to treat VCFs. It is charged that, after the third person died on the
operating table during a surgery in which a Norian cement was used to treat
VCFs, the company cancelled the future surgeon forums. The indictment alleges
that the company considered, but rejected, the idea of recalling or removing
XR from the market, either of which actions would have required them to notify
the FDA.

Three months later, according to the indictment, when the FDA conducted an
unannounced inspection at the Norian plant in West Chester, focused on whether
or not Norian and Synthes had conducted an unauthorized clinical trial of XR,
a number of Synthes employees, including individual defendants Huggins, Bohner
and Walsh, made materially false and misleading statements to the FDA
investigator.

(End Summary of Charges)

"The Department of Defense is outraged by a company that potentially puts our
military personnel, their family members, and veterans at undue risk for
serious medical complications or even death, just to increase their corporate
bottom line," said DCIS Assistant Special Agent in Charge Kenneth Maupin.
"Criminal matters that affect the welfare, morale and readiness of our men and
women in the military are of the highest priority to the Defense Criminal
Investigative Service. Our military put their lives on the line every day for
the American people. They deserve to feel safe that they and their families
are not put at undue risk when having a medical procedure."

"Corporate profits and individual greed, which caused the company to skirt the
rules and compromise patient safety, were at the core of this investigation,"
said VA Inspector General George Opfer. "This team of investigators worked
tirelessly to move this case forward and our citizens were well served by
their efforts."

INFORMATION REGARDING THE DEFENDANTS
NAME ADDRESS AGE OR YEAR OF BIRTH
Norian Corporation West Chester, Pa.
Synthes, Inc. West Chester, Pa.
Michael D. Huggins West Chester, Pa. 51
Thomas B. Higgins Berwyn, Pa. 52
Richard E. Bohner Malvern, Pa. 55
John J. Walsh Coatesville, Pa. 46

If convicted defendant Norian Corporation faces a maximum possible sentence of
a fine of $26,000,000, five years probation, full restitution, forfeiture of
$469,800 and special assessments of $20,800. Defendant Synthes faces a maximum
possible sentence of a fine of $8,800,000, five years probation, full
restitution, forfeiture of $469,800 and a special assessment of $5,500. Each
of the individual defendants faces a maximum sentence of one year in prison, a
fine of $100,000, full restitution and one year of supervised release.

This case was investigated by the FDA, Office of Criminal Investigations; HHS
Office of Inspector General (OIG); DCIS; and the VA OIG. The case is being
prosecuted by Assistant United States Attorneys Mary E. Crawley, Gerald B.
Sullivan, David J. Caputo, Laura A. Pawloski, Associate Chief Counsel, FDA
Office of Chief Counsel, and Joel Schwartz, Trial Attorney, U.S. Department of
Justice, Office of Consumer Litigation.

COPIES OF NEWS MEMOS AND RELATED DOCUMENTS CAN ALSO BE FOUND AT
http://www.usdoj.gov/usao/pae

1. An indictment or information is an accusation. A defendant is presumed
innocent unless and until proven guilty.

2. Norian SRS and Norian XR were bone cements that were used in treating
fractures.

SOURCE U.S. Department of Justice

Patty Hartman of the Office of United States Attorney Michael L. Levy, Eastern
District of Pennsylvania, +1-215-861-8525